Crude rises as Europe economic data boost demand optimism, pressure dollar

April 28, 2011 - 0:0

Crude climbed after European economic data indicated demand may be recovering in the region, easing concern that oil prices near their highest in more than two years may be hurting growth.

Brent advanced as much as 0.7 percent after reports showed that industrial orders in the euro region gained for a fifth month in February, led by demand for capital goods, and that Britain’s economy rebounded in the first quarter as growth surged in the service industry. The dollar traded near a 16- month low against the euro and a two-year low against the pound, boosting the appeal of commodities priced in the U.S. currency.
“The European figures are encouraging,” said Andrew Johnston, a London-based commodities trader at One Financial Markets. “Everyone’s negative on the dollar at the moment.”
Brent for June settlement rose as much as 84 cents to $124.98 a barrel and was $124.60 at 11:10 a.m. on the ICE Futures Europe Exchange in London. Crude in New York was up 39 cents at $112.60 a barrel after rising as much as 58 cents, or 0.5 percent to $112.79.
Futures in New York fell earlier by as much as 0.5 percent after U.S. Treasury Secretary Timothy Geithner said oil prices have become an obstacle to economic growth.
Oil’s rally has created “new headwinds” against economic growth, Geithner told the Council on Foreign Relations in New York on Tuesday, even as a Conference Board index showed consumer confidence increased more than forecast in April.
-----------------Crude supplies
U.S. crude inventories probably increased last week against a drop in gasoline supplies, a Bloomberg News survey showed before the Energy Department report.
Crude stockpiles climbed 1.7 million barrels from 357 million in the week ended April 22, according to the median estimate of 13 analysts polled. Gasoline stockpiles are expected to have decreased 1 million barrels from 208 million.
The industry-funded American Petroleum Institute said on Tuesday gasoline inventories fell for a 10th week, the longest losing streak since August 1994. Crude supplies gained the most in four weeks. The Energy Department will release its Weekly Petroleum Status Report at 10:30 a.m. on Wednesday in Washington.
Gasoline shipments to the U.S. from Europe are poised to drop in April to the lowest in four months, reinforcing speculation that a surge in pump prices is hurting consumption in the world’s biggest oil user.
At least 15 tankers were scheduled to ship 570,000 metric tons of the fuel to the U.S. Atlantic Coast from Europe as of April 20, the least for a comparable period since December, according to Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker.